Emirates again cuts capacity in Auckland as new Bali flight is reduced

Emirates Airline is again reducing capacity to New Zealand as the airline cuts its new Auckland-Bali service from seven to four weekly frequencies.

Summary:

Emirates is cutting its Auckland-Bali-Dubai service from seven to four weekly frequencies in Jan-2019;

Emirates only launched Auckland-Bali in Jun-2018, partially offsetting capacity reductions in the Auckland market from earlier in 2018 as it dropped cross-Tasman services to Brisbane and Melbourne;

Auckland-Bali traffic is highly seasonal and likely proved insufficient to support a daily year-round service while Auckland-Dubai passengers generally prefer the nonstop option.

Emirates launched daily 777-300ER service from Auckland to Bali service on 14-Jun-2018 – just in time for the peak season for the outbound market. Auckland-Bali is the first leg of a new one-stop service from Auckland to Dubai that supplements Emirates’ Auckland-Dubai nonstop flight.

However, Emirates recently announced the Auckland-Bali service will be reduced to four weekly flights from 21-Jan-2019, or just seven months after it was launched. The new schedule will result in a 43% reduction in capacity, from 2,478 weekly one-way seats to 1,416 seats.

The reduction is hardly surprising given that the Auckland-Bali market does not yet seem large enough to support a daily year-round service – despite growth in recent years.

Bali attracts close to 40,000 New Zealand visitors per year. While New Zealand visitor numbers to Bali has grown by more than 30% over the past two years, the market is highly seasonal and there are aggressively priced one-stop options from Australian carriers.

Emirates has the only year-round nonstop flight from Auckland to Bali. While it would be easier to maintain a daily service in the southern winter months, Emirates has to contend with competition form Air New Zealand (Air NZ) in the winter. Air NZ has operated seasonal services to Bali for several years and increased its Bali capacity this winter, which likely impacted the performance of the new Emirates service.

Air NZ this winter operated up to five weekly flights to Bali. In prior years it never had more than three weekly Bali flights. Air NZ also began the season earlier this year, serving Bali from early April until mid-October compared to late May to mid-October in prior years.

While Air NZ caters entirely to the local market, some Emirates passengers from Auckland to Bali continue to Dubai. Emirates may have anticipated a larger number of Dubai passengers but discovered that its Auckland passengers prefer the nonstop Dubai service when heading to Dubai or beyond (most of Emirates’ Auckland passengers are heading to Europe).

CHART – An insight into Auckland – Bali seat capacity highlights just how much additional capacity Emirates has introduced into the marketSource: CAPA – Centre for Aviation and OAG

Emirates launched a daily nonstop service from Auckland to Dubai in Mar-2016 using 777-200LRs and upgraded the route to A380s in Oct-2016. Previously Emirates only operated one-stop services to Dubai via Australia and its Auckland-Europe passengers likely have come to appreciate the nonstop to Dubai and one-stop Europe product. Qatar Airways’ Feb-2017 launch of Auckland-Doha also made it harder for Emirates to persuade passengers heading from Auckland to Europe to fly on a one-stop Dubai product.

For the peak holiday season (December and first half of January), Emirates likely can fill the Auckland-Bali flight with Auckland-Dubai passengers willing to make the extra stop. However after mid-January it could be hard to attract Auckland passengers to take the one-stop Dubai option, leading to the decision to cut Auckland-Bali-Dubai to four weekly flights from 21-Jan-2019.

The reduction in Auckland from 14 to 11 weekly flights is a disappointing development for Auckland Airport and local consumers as the new daily Bali service partially offset earlier reductions by Emirates in the Auckland market. Two years ago, Emirates had four daily flights (28 weekly departures) in the Auckland market. But Emirates dropped Auckland-Sydney service in mid-2017 followed by Auckland-Brisbane and Auckland-Melbourne in Mar-2018; all three services were operated daily and continued to Dubai.